Page last updated at 00:24 GMT, Thursday, 19 June 2008 01:24 UK

US tanker deal thrown into doubt

KC-30 tanker
EADS' KC-30 aircraft is based on the Airbus A330

Boeing should get a second chance to bid for a $35bn US Air Force contract, a US government agency has said.

The Government Accountability Office (GAO) upheld Boeing's protest against the awarding of the air tanker deal to rivals Northrop Grumman and EADS.

It said that the Air Force had made a "number of errors" that could have swung the outcome of the competition.

The GAO's ruling is not binding, but it puts huge pressure on the Air Force to put the process out to tender again.

The GAO said in a statement: "The Air Force made a number of significant errors that could have affected the outcome of what was a close competition.

"We therefore sustained Boeing's protest."

Massive victory

The decision is a massive victory for Boeing, paving the way for it to win back all or part of the contract, which was for 179 new aircraft.

It's important to recognise that the announcement is an evaluation of the selection process, not the merits of the aircraft
Louis Gallois
EADS chief executive

It was welcomed by many US lawmakers, who had been angered over the possibility that US jobs could be lost to Europe, particularly with the economy so fragile.

The Air Force said it would review the ruling and set out its response.

"The Air Force will select the best value tanker for our nation's defence, while being good stewards of the taxpayer dollar," it added.

The news was met with disappointment from Airbus parent firm EADS, but chief executive Louis Gallois remained upbeat.

"It's important to recognise that the announcement is an evaluation of the selection process, not the merits of the aircraft," he said.

Randy Belote at Northrop Grumman said, "We continue to believe that Northrop Grumman offered the most modern and capable tanker."

The Northrop tanker - the KC-30 - would be based on the Airbus A330, while Boeing's offering is the KC-767, a new version of the Boeing 767.


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